618.39 Assisting unauthorized insurers.

(1) Conduct prohibited. No person may do an insurance business in this state if the person knows or should know that the result is or might be the illegal placement of insurance with an unauthorized insurer or the subsequent servicing of an insurance policy illegally placed with an unauthorized insurer.

(2) Personal liability for violation. Any person who violates sub. (1) is personally liable to any claimant under the policy for any damage proximately caused by the person's violation. That damage may include damage resulting from the necessity of replacing the insurance in an authorized insurer or the failure of the unauthorized insurer to perform the insurance contract.

(3) Standards by rule.

(a) The office may by rule promulgate standards for any of the following:

1. Establishing that a person should know that the result of insurance business is or might be the illegal placement of insurance with an unauthorized insurer or the subsequent servicing of an insurance policy illegally placed with an unauthorized insurer.

2. Imposing requirements under s. 601.42 or 628.04 or sanctions or remedial measures under sub. (2) or s. 601.64, or any other applicable penalty or remedial provision of chs. 600 to 646, for a violation of this section.

(b) Notwithstanding par. (a) 1., it is not necessary for the office to promulgate a rule under par. (a) 1. to establish that a person violated sub. (1).

History: 1971 c. 260; 1975 c. 371, 421; 2001 a. 65.

Legislative Council Note, 1975: Sub. (2) is added as an effective sanction to suppress knowing placement of insurance with unauthorized insurers. It is adapted from Conn. Insurance Laws, Sec. 38-90. Insurance agents and others should guarantee performance of insurance contracts they negotiate knowingly with unlicensed insurers, unless legally negotiated under the surplus lines law. In addition, the sanctions of s. 601.64 apply to violators of this provision. [Bill 16-S]